Find all blog entries at A Commoner Manifesto Substack.
Gold Reacts to Trump Fed Nomination
President Trump nominated Kevin Warsh to be Chairman of the Federal Reserve Board today and:
Gold is off 9%
Silver is off 27%
Platinum is off 18%
Does that mean that inflation is off the table?
Not really. Because as long as the government is spending 40% of GDP and issuing debt the Fed is going to have to monetize that debt when the government gets in a jam.
And next time there is a credit crisis the Fed will print money to get out of the jam. For instance, right now the AI tech lords are borrowing money like mad to finance their server farms. But suppose that Grok takes over the world and all the other AI guys fail? What happens to the borrowers?
Last time we had a credit crisis, in 2008, the Fed didn’t just act as “lender of last resort” but actively injected money into the economy through “quantitative easing.” Kevin Warsh — who joined the Federal Reserve Board in 2006 — supported “QE” during the actual crisis in 2008 but was opposed to continuing use of QE in subsequent years.
I suspect that QE doesn’t make a blind bit of difference when it comes to economyic recovery. It’s just Keynesianism with a pretty face.
Now I happen to believe that I am the world’s foremost expert on national economics and debt and finance. I published my views in 2017 in a blog entry “Why Personal Debt is Different from Government Debt.” I wrote that the big problem in finance is that a lot of money that is borrowed should be equity.
What do I mean? Simply, that you should only borrow money when you know you will be able to service the loan, even if things go South. If you just hope that things will work out then the investor in your scheme should be an equity partner, not a creditor.
But first, the fundamentals of debt, from Walter Bagehot:
First, people with debt must be able to service their debt. Obviously, if people do not pay their interest then the whole credit system goes upside down.
Second, debt must be properly collateralized, so that it can be liquidated when a borrower fails to service the loan. This is a confidence issue.
Back in the day, before the glorious dawn of Fannie and Freddie, you could only get 50% mortgages, and you had to refinance after ten years. Do you see how that protects the lender?
Back in the 2000s the government was encouraging liar loans, which allows people to buy houses that can’t service the loan. And they pushed low-down loans, so that when there wa a crisis the value of the house would be below the value of the loan.
Good old government. Violated both of Bagehot’s rules of debt.
But there’s more. Take student debt. A student borrows money to get a college degree. Why? Because experts agree that a college graduate earns more money. But it’s not like real debt, which is collateralized so the lender can be reimbursed if the borrower can’t pay back the loan. Really, when the government loans money to a student it is making a bet that the student will be able to earn a larger income. There is a word for a bet like that: equity. You invest in a share in a company and if it prospers you make money. If it fails, you may lose everything. But them’s the rules with equity investment.
Same thing with low-down mortgages: they are risk propositions: that the borrower will keep their job, that the price of the house will not go down. So maybe it would be better for the bank to be an equity partner in the home rather than a creditor.
There’s another interesting thing about debt. The little guy always loses. If a little guy can’t pay his debt, he may lose everything. Same with government debt. If the government can’t pay its debt because it lost a war, the little guy loses everything.
I think that is a problem and I think that all the scholars and experts and finance wizards need to get together to do something about it.
Now, I don’t know what Federal Reserve Chairman Kevin Warsh will do. Whether he will help us reform the credit system to limit debt to low-risk propositions, or not. And whether he will avoid flooding the world with money after a credit crisis, or not.
But is sure is interesting that precious metals took a dive on the day that Presdent Trump nominated him to be Chairman of the Federal Reserve Board.
| perm | 01/30/26 11:52 pm ET | comments |
An Anthropologist Visits a Primitive Tribe
Liberals believe in politics, so they have to have an enemy. The enemy? That's you and me.
But I regard politics as rather beneath my dignity: a culture for educated lowlifes: not really out of the top drawer. Advanced, noble people like you and me don't have enemies. Because every human is human, as flawed as you and me.
But, experts and anthropologists agree, there are modern nations and then there are First Nations.
And to me liberals are a First Nation. Their primitive culture, their ingrained tribalism, their ignorance of modern philosophy is, to me, a fascinating anthropological research project. Why do our liberal friends cleave so tenaciouslly to their ancient tribal traditions and culture?
Socialism? Who would be so ignorant or primitive to imagine that it means “the warmth of collectivism” after the cold-blooded murder of 100 million humans under socialist regimes in the last century?
Then there is the administrative state and it's “knowledge problem” attested to by all the best experts. How primitive do you have to be not to know about Hayek and the “knowledge problem?”
And yet, I experience my life as that of an intrepid explorer hacking my way with a machete into the gentrified urban wilderness, stumbling on an previously unknown tribe that nobody ever heard of before. And I wonder: Where are the Margaret Meads? The Frank Boases? The Jane Goodalls? Given the startling lack of anthropological science about this curious tribe, you would think that every young academic in America would be breaking down the door of their faculty advisor to be the first to develop a comprehensive theory of First Nation Liberalism and its gods, its origin myth, its cultural traditions, its peculiar sexual practices and other unique peculiarities.
Imagine a TV documentary showing us the daily life of First Nation liberals in their ancestral gentrified urban tribal lands practicing their ancient tribal “protest” rites. What a ratings hit it would be! I wonder who should narrate it: Greg Gutfield? You can imagine the usefulness of carefully introducing the “Karen” culture to ordinary Americans previously ignorant of this important liberal subculture in the gentrified tribal lands.
You may wonder why I should come up with this scientific post today of all days. Let me just say that I was with a nice liberal recently and everything “they” said was straight liberal narrative. Just as a primitive tribe would present to an anthropologist stumbling upon an undiscovered tribe in the Amazon jungle.
Seriously, we do not waste a moment by investigating and deepening our understanding of our liberal friends. Because Sun Tzu:
If you know the enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle.
Don’t tell your liberal friend about this. It’s just between you and me. Capisce?
But wait! I just said, up front, that we wise ones don’t believe in enemies…
| perm | 01/30/26 3:51 am ET | comments |
Switch to Substack for more blog posts
Christopher Chantrill
He runs usgovernmentspending.com, the go-to resource for government finance data, and is a frequent contributor to the American Thinker. He lives in Seattle, Washington. Click for more.
“I love this guy.” — Steve Ballmer
A Commoner Manifesto
Commoners have nothing to lose but their shame
The simplest way to understand human society is as Three Layers such as Nobles, Yeomen, and Serfs.
My take on Three Layers is my Three Peoples Theory of Creatives, Responsibles, and Subordinates.
I believe that we moderns live in Three Worlds: the War World of politics, the Market World of the economy, and the Life World of family and neighborhood.
The world that we all live in today is the one created by the German Turn in philosophy, psychology, science, and meaning.
But our modern elite, the educated elite, has taken, I believe, a Wrong Turn and has imposed a cultural Great Reaction on the world, a lurch back to the primitive. This manifests in the elite’s conceited Activism Culture and its patronage of Subordinate people as its Little Darlings.
The principal reason for the elite’s Wrong Turn has been that it does not understand and does not want to understand how the Three Peoples’ Religions are necessarily different.
The root of the educated elite’s Wrong Turn is its conceit that it knows what the world needs. I think there is a better way; I call it “A Good Life Better than the Left”.
ABC of Politics – Activism Culture – “Anatomy of Revolution” – Allyism – Critical Theory – Downstream-ism – Dutch Finance – German Turn – Good Life – Great Reaction – Little Darlings – Perfect Plan – Women in the Public Square – Ruling Class – Three Layers – Three Peoples – Three Peoples Religion – Tribalism – Two Cultures – Wrong Turn
Today’s topic: The Culture of the Ally, that helps Oppressed Peoples, or not.
